March 1, 2002 - 12:00pm - Colleen Moore Tinker

EDITORIAL NOTE: From the AT Archive; Jan/Feb 1999

When the scandal surrounding Robert Folkenberg, then president of the General Conference, began breaking, Adventist Today reported on it via our web site, atoday.com. At the height of the crisis the web site registered more than ten thousand visitors per day. In this case the web site led and the magazine followed. Then-managing editor Colleen Tinker spent countless hours providing most of our coverage of this affair.

 

Robert S. Folkenberg, president of the General Conference of Seventh-day Adventists, resigned Monday, February 8, at a special meeting of the General Conference staff at 11:00 A.M. Eastern Standard Time.

Folkenberg, the General Conference Corporation, and the Inter-American Division were served a summons and complaint with a charge of fraud during the last week of December, 1998. Also named as defendants were Walter Carson, a member of the General Conference (GC) legal department who once served as legal counsel and director for a non-church organization that had business dealings with the plaintiff; Ben Kochenower, an accountant not employed by the church; two businesses: Kanaka Valley Associates, a California limited partnership; and Sharing International, Tennessee; and [John] "Does" one through 50.

James E. Moore, a Sacramento entrepreneur, filed the suit on August 21, 1998, in the superior court of California in Sacramento County.

According to Neil Wilson, former president of the GC, Moore, a non-Adventist, donated some shares in some land to the church in the mid-1970’s. Folkenberg, who was then in the Inter-American Division, facilitated the gift as a benefit to the Inter-American Division (IAD). The IAD felt that the arrangement was "not reputable", according to Wilson, and suggested the shares be put into a small corporation. Folkenberg was part of the resulting corporation established in Tennessee for the purpose of safeguarding the property for possible benefit to the church.

During the ensuing years Folkenberg continued to have business dealings with Moore. According to Wilson and to another church representative who requested anonymity, Folkenberg was involved in the establishment of several more corporations, some of which grew out of the original deal, and some of which were related to different projects.

In 1989, according to the GC and Wilson, Moore was convicted of felony grand theft involving some land deals and served two years in a state camp.

When Folkenberg became president of the GC in 1990, he gave up his officer status in the corporations he had formed with Moore. He continued, however, to have personal dealings with Moore even though he knew of Moore’s conviction and sentencing.

Moore’s lawsuit was the catalyst which triggered the discovery of Folkenberg’s continuing dealings with Moore.

Complicated Suit

The suit, which is complicated and difficult to understand, says that Mr. Moore "owned an interest in the Kanaka Valley Associates" which "owned real property in California." In May, 1993, the suit states, Moore made a written agreement with the defendants and also one Robert Dolan. (According to a limited partnership status report which Adventist Today obtained on January 27, 1999, Mr. Dolan is the agent and the first general partner of Kanaka Valley Associates.)

Moore agreed to sell his interest in Kanaka Valley Associates for two promissory notes totaling $8 million. According to the agreement, the two notes were to be transferred to an offshore corporation called Sharing International, Barbados. From there the shares were going to be distributed to two other corporations. Fifteen percent was going to go to an organization called Sharing International, Tennessee, and eighty-five percent would go to a corporation called Vicariatus Urbis Foundation. (Folkenberg had been an officer in Sharing International, Tennessee, before he became GC president.)

The suit claims that Mr. Moore agreed to grant Sharing International, Tennessee fifteen percent of the shares because of the defendants’ promises to issue 85 percent of the shares to Vicariatus Urbis Foundation. The defendants, alleges the suit, never issued the 85 percent to Vicariatus Urbis Foundation. Moore learned of their failure to issue the money on or before August 21, 1996.

In 1994 Robert Dolan declared bankruptcy. The above named defendants, the suit alleges, entered a settlement agreement with Robert Dolan’s bankruptcy estate, and Sharing International, Barbados issued all of the interest in the $8 million promissory notes to the bankruptcy estate of Robert Dolan instead of dividing it between Sharing International, Tennessee and Vicariatus Urbis Foundation.

In the suit Moore alleges that the defendants concealed from him their agreement with Robert Dolan, and they also concealed the fact that they never had the shares transferred from Sharing International, Barbados to Vicariatus Urbis Foundation.

Moore alleges fraud, and he is suing for the entire $8 million. Further, the suit states that "the actions of defendants in giving up the $8.0 million promissory notes were unlawful and void pursuant to the laws of the country in which Sharing International, Barbados is located.…[The] plaintiff contends that giving up Sharing International, Barbados’ $8.0 million promissory notes and transferring them to the Bankruptcy Estate of Robert Dolan was null and void from its inception, and that Sharing International, Barbados, is still the owner of the $8.0 million promissory notes." Moore is requesting that the court declare who legally owns the $8.0 million promissory notes so he and Vicariatus Urbis Foundation can determine their rights regarding the shares.

Corporation’s Histories Investigated

Adventist Today reporter Albert Dittes has researched the corporate history of Sharing International, Tennessee and also of Sharing International, Barbados. According to corporate documents on file in the state of Tennessee, Sharing International, Tennessee was a non-profit organization established on June 3, 1974, for "charitable endeavors in the United States and throughout the world."

In April, 1985, its charter was revoked, but it was reinstated in December, 1987, with R.H. Pursell as the registered agent at 101 Cumberland Ave., Suite 209, Madison, Tennessee. Dittes visited the building on Cumberland Avenue and learned that Sharing International, Tennessee never occupied office space in that building. Pursell, an attorney, had his office there, and he used his address for Sharing International, Tennessee.

The next filing on record is dated January 3, 1989, and lists Robert Folkenberg as president, Duane McBride as secretary, and Terry Carson, brother of lawsuit defendant Walter Carson, as treasurer. Cline, Brandt, Kochenower and Co., a CPA firm in Gaffney, SC, reinstated the charter.

When Folkenberg became GC president in 1990, the corporation’s annual report listed Ben D. Kochenower as president with McBride and Carson remaining as secretary and treasurer. They changed the mailing address to 1225 Baker Blvd., Gaffney, SC, but Pursell remained as principal agent in Tennessee.

Dittes reached Pursell by telephone, and Pursell stated that he did not know that he was still listed as the corporation’s agent.

In 1998 the corporation did not file its annual report, due on October 1, and the corporation dissolved.

Sharing International, Barbados, on the other hand, is more obscure. Dittes requested corporate information from Barbados officials, and they informed him that the corporation dissolved three years ago. Its records, an official told him, have been stored in a vault and are not accessible. The official further mentioned that the government of Barbados had experienced some "disputes" with Sharing International, Barbados.

The status report on Kanaka Valley Associates, which Adventist Today received from Sacramento on January 27, states the business address as 3340 Via Alegre, Santa Barbara, California. This address is the same as that listed for first general partner Robert A. Dolan. It also states that the partnership was terminated on December 31, 1998.

Vicariatus Urbis Foundation, Ltd., according to a biography of James Moore emailed by Bruce Babienco in The Pastor’s Net, is "a non-profit organization of the Roman Catholic Church, Diocese of Rome, Connection Office." Its name means "Vicar of Rome Foundation." The foundation’s chairman emeritus is Monsignor Virgilio Levi, press secretary of the Diocese of Rome. Moore has been its vice chairman and director since 1974.

Ad Hoc Committee Reviews Evidence

An ad hoc committee appointed by the GC Administrative Committee met at the Dulles Airport Marriott Hotel in Washington, D.C., on Monday and Tuesday, January 25 and 26, to review issues that could affect the world church which were brought up as a result of the lawsuit. These issues, said Neil Wilson and other sources, involved the nature of Folkenberg’s continuing business dealings which grew out of the initial contact with Moore. The committee’s directive was to examine the evidence and to make a report with recommendations to the Administrative Committee and the world division presidents.

On Wednesday, January 27, the division presidents joined the GC Administrative Committee in Washington D.C. to hear the results of the committee’s work and to review their findings.

According to a highly placed source who attended all three meetings, the ad hoc committee in concert with the division presidents and the administrative committee agreed that the evidence was serious enough to refer action to the General Conference Executive Committee. The Administrative Committee does not have the power to make decisions regarding the GC presidency; only the GC Executive Committee can do that. The next meeting of the GC Committee was scheduled for April, but the church "couldn’t wait until April," according to our source.

A special meeting of the GC Executive Committee was set for March 1, at which time it would make a decision about the presidency.

In the meantime, our source says, the assembled committees unofficially advised Folkenberg to take time off between their meeting and March 1 to be with his family and to look for work.

Folkenberg "knows it’s over," stated our source. But even though he was on unofficial leave, Folkenberg was still the president of the General Conference.

General Conference policy states that in the absence of the president the secretary is next in authority. If there had been a disaster, stated our source, the General Conference would have tried to get in touch with Folkenberg. For ordinary business, however, they looked to secretary Ralph Thompson until March 1.

Folkenberg Resigns

On Monday, February 8, Robert S. Folkenberg read a short resignation speech addressed to G. Ralph Thompson, Secretary to the Executive Committee, in a special meeting of the General Conference staff convened in the chapel at GC headquarters at 11:00 A.M. He said that the controversy resulting from the lawsuit was detracting from God’s work, so he would step down from his office.

"To avoid additional pain and conflict to my family and the church I love, I am removing myself from the controversy by tendering my resignation through you to the General Conference Executive Committee," he said. "I will continue to give my all to advancing the mission of the church, and I pray that through this action the church can maintain its focus on the task our Lord has entrusted to us."

Thompson, in Loma Linda, California, for meetings later the same week, spoke at a denominational retiree’s luncheon in the Loma Linda Civic Center on Wednesday, February 10. In a short address he briefly outlined the events leading up to Folkenberg’s resignation. He mentioned Folkenberg’s continued involvement with James Moore. He stated that, among other things, Folkenberg had personally (as opposed to officially) introduced certain African church leaders to James Moore, but that he had made these introductions on General Conference letterhead. This action, he said, gave the appearance of a conflict of interest.

In a short question and answer period following Thompson’s talk, one luncheon guest asked if the General Conference Executive Committee would elect an interim president when they meet in March or if they would elect a president eligible for re-election.

Thompson replied that the committee would elect a president who would then be eligible for re-election in the year 2000.

An Adventist Today representative asked whether the General Conference would deal with the employment of Walter Carson, one of the associates in the General Conference legal department who is also named as a defendant in the Moore lawsuit.

Thompson replied that such action might be "down the road," but that the General Conference had no plan to do anything to change Carson’s employment since he "was just the legal counsel to a corporation that was involved."

Legal Update

The General Conference Corporation and the Inter-American Division have retained Sacramento attorney Phil Hiroshima to represent them. Hiroshima, an Adventist, has handled many of the GC’s sensitive cases over the past twenty years.

Hiroshima has filed a demurrer, which is a request to the court to dismiss the lawsuit on the grounds that the complaint is insufficient to sustain the claim against the General Conference and the Inter-American Division.

The court will hear the demurrer on February 26, 1999, and in all probability it will allow Mr. Moore to amend his complaint in order to state the case with more specificity. If the church or any other defendant can show that it or he is not legally liable for the charges brought against it or him, the court can dismiss that party from the lawsuit even if other party defendants remain.

Folkenberg’s attorney has requested an extension to file a responsive pleading, but the church wants to pursue its defense without delay.